OpenAI's plan to restructure its business may shift to 2026 as it negotiates new contract terms with key backer Microsoft (NASDAQ:MSFT).
The talks, which aim to redefine Microsoft's rights and influence over the ChatGPT maker, are critical to unlocking billions in fresh funding and paving the way for a potential IPO.
The $300 billion AI start-up has been working to replace its profit-sharing structure with equity ownership for investors.
Also Read: OpenAI Just Raised $8.3 Billion At This Valuation As ChatGPT Growth Soars
But insiders flagged friction between Microsoft and OpenAI over key issues, including Microsoft's exclusive cloud hosting rights, future access to OpenAI's intellectual property, and a contentious "AGI clause" that lets OpenAI revoke Microsoft's privileges if it achieves artificial general intelligence, the Financial Times reported on Wednesday.
Microsoft CEO Satya Nadella reportedly wants to scrap the clause, while OpenAI views it as critical leverage. Both companies expect Microsoft's stake to settle between 30-35%, reflecting more than $13 billion already invested, though the figure could change depending on the deal.
OpenAI's plan to restructure faces mounting hurdles as regulators demand independent valuations and investors battle over equity stakes.
Delaware's attorney general hired an investment bank to assess the nonprofit parent's share in the new entity, while Microsoft is disputing its stake and could block the deal.
The company must secure approvals from Delaware and California attorneys general, resolve Elon Musk's lawsuit, and meet a year-end deadline to avoid losing up to $20 billion in SoftBank (OTC:SFTBF) funding critical for AI model development, device launches, and data center expansion.
In August, a federal judge rejected Musk's bid to dismiss OpenAI's countersuit, allowing the company to pursue claims he ran a years-long campaign to damage it. Musk, who sued OpenAI and Sam Altman over its for-profit shift, now faces a 2026 jury trial as the company accuses him of fraud and a "sham bid" for its assets.
Musk's xAI and X sued Apple (NASDAQ:AAPL) and OpenAI, accusing them of colluding to block competition and favor ChatGPT over Grok. The Texas lawsuit seeks billions in damages, claiming Apple and OpenAI "locked up markets" to maintain dominance as Musk expands xAI's AI push with massive investments and a failed $97 billion OpenAI takeover bid.
Despite this, OpenAI continues to pursue a secondary share sale at a $500 billion valuation and has attracted investor interest in new funding at even higher levels.
Price Action: MSFT stock is trading higher by 0.29% to $503.50 premarket at last check Wednesday.
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